Wednesday, April 22, 2009

Uncompetitive Moroccan Travel Industry

For millions of people, the months of April through June are travel planning period. In particular for the diasporas that is looking to go back home to North Africa during the summer season, but also for foreign tourists as well. This latter category is a critical target for the Moroccan tourism industry, which is apparently finding difficulties offering competitive prices in a highly budget-sensitive period.
Every indicators that I saw, from all-inclusive packages, to basic airfares, indicate that Morocco tends to price much higher than its competitors. At the very basic level, a flight from New York to Casablanca August 1 to August 8 fetches lower prices with Delta Airlines ($1,263 nonstop, $1,200 one stop), Northwest Airlines at $1,226 with one stop, and then Royal Air Maroc starting $1,271. It is clear that the Delta’s direct nonstop uses code share with RAM, so it comes to me as a surprise that RAM’s has higher than everyone else.

As we are looking to bring a reporter from Algiers to New York for the month of May, the prices we found ranged from the low of $950 with Lufthansa via Frankfurt and a massive $2,000 with Royal Air Maroc via Casablanca, the most expansive option. In tight money periods, you can conclude who won the business!

One would argue that the US destination should come at premium for the Moroccan carrier, and may be forgiven for having slightly higher prices. But Royal Air Maroc pricing discrepancy is valid across all its destinations and not just North America. August 1 to 10 round-trip from Paris to Casablanca is priced today by Royal Air Maroc at $698. Air France charges $437, a $261 difference, which is very substantial for millions of immigrants. This could be opportunities potentially lost for the Moroccan carrier at a time when the country needs every dollar it can generate.

Airfares are not the only data points that make me think Morocco remains a highly expensive destination as a whole. An October 2008 issue of Budget Travel magazine featured a “40 Best Deals” article, which listed some of the best priced vacation packages. In glancing through the list of destinations, I was excited to see that Morocco was prominently displayed. But my excitement faded away very quickly when looking the details. Deals ranged from a low Cancun, Mexico 3-nights, all-inclusive at $388, to an average priced six-night in Rio de Janeiro at $1,299, to the most expansive 15-night India tour, with flight, lodging and meals at $4,095. The stunning feature on Morocco is that the destination competed with the highest cost India, with Morocco’s 13 day tour costing $4,070, but excludes “fuel surcharge” estimated at $285. So in essence, of the 40 deals picked by Budget Travel magazine, Morocco was the most expansive at $4,355.
Morocco is not on the other side of the world and with its infrastructure, it is astonishing that it still cannot find the right price points to stimulate its tourism industry, at a time when travelers globally are looking for best deals. I expect when Marrakesh, Fes and other key Moroccan destinations release their tourism data, they will realize that Tunisia, Greece, Egypt and other destinations have won the price war.
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